• New Illinois Laws Help Homeowners and Communities
  • May 29, 2013 | Author: Carolyn Artus
  • Law Firm: Weltman, Weinberg & Reis Co., L.P.A. - Chicago Office
  • In order to address an unprecedented number of foreclosure filings, the Illinois Supreme Court and the State Legislature have enacted new rules to govern foreclosure practice throughout the State of Illinois. The new rules emphasize homeowner assistance and the stabilization of communities. For example, when a mortgagor appears in court or files pleadings in a foreclosure case, the lender must prove that it made every effort to offer the mortgagor loss mitigation. To that end, the lender is now required to supply the court with an affidavit attesting to what type of loss mitigation program was available, what steps the lender took to offer assistance, and the status of those efforts.1 The Illinois Supreme Court enacted the rule to prevent the entry of a foreclosure judgment unless the lender complies with applicable local, state, and federal loss mitigation requirements, recognizing that it is in the best interest of all parties, the courts, and local communities to avoid a foreclosure sale through a work-out.2 Further, this new requirement will prevent “dual tracking” by the lender, where the mortgagor is attempting loss mitigation, but the lender proceeds with the foreclosure process.3

    In addition, the Governor of Illinois enacted a law that is expected to generate millions of dollars annually statewide for housing counseling assistance and for local governments to maintain and secure abandoned residential properties.4 The law increases residential foreclosure complaint filing fees as of June 1, 2013, based on a sliding scale of $500.00 to $50.00, depending on how many foreclosures the lender filed in the preceding calendar year.5 The additional fees will be paid in to the Foreclosure Prevention Program Fund and the Abandoned Residential Property Municipality Relief Fund. According to the Governor’s Office, the additional fees will provide an estimated $28 million to local governments to maintain abandoned residential properties and an estimated $13 million for housing counseling assistance.6

    Effective June 1, 2013, this new law also provides for a fast track foreclosure process for abandoned residential properties, which will reduce the foreclosure process to a period of 90 to 180 days from a current average of 600 days.7 The Governor expects the law to restore neighborhoods and property values by shortening the foreclosure process for abandoned properties, which can fall into disrepair or provide opportunity for crime.8

    1 Illinois Supreme Court Rule 114.
    2 Illinois Supreme Court Rule 114, Committee Comments, April 8, 2013.
    3 Mary Ellen Podmolik, “New Rules to Govern Illinois Foreclosures,” Chicago Tribune, February 22, 2013.
    4 Public Act 097-1164; Illinois Governor Quinn press release dated February 8, 2013.
    5 Public Act 097-1164. 735 ILCS 5/15-1504.1.
    6 Illinois Governor Quinn press release dated February 8, 2013.
    7 Public Act 097-1164; 735 ILCS 5/15-1108; 735 ILCS 5/15-1200.5; 735 ILCS 5/15-1200.7; 735 ILCS 5/15-1505.8; Mary Ellen Podmolik, “Quinn Signs Bill to Fast-Track Foreclosures on Abandoned Buildings,” Chicago Tribune, February 8, 2013.
    8 Illinois Governor Quinn press release dated February 8, 2013.